Stock Market News

Dignity benefits from increased deaths and acquisitions

- FY revenues up 12 per cent
- PBT and EPS both up 15 per cent
- 2014 started quietly, as expected

An increase in the death rate and the largest acquisition in its listed history helped funeral services and crematoria group Dignity deliver double-digit growth in 2013.

On revenue up 12% to £256.7m, the FTSE 250 group grew underlying profit before tax and earnings per share 15% to £52.9m and 72.1p respectively.

Chief Executive Mike McCollum said: "Our largest acquisition since flotation has integrated well and is performing in line with our expectations. Our core businesses have also produced a strong performance, delivering robust operating profit growth in the year."

The group also spent £60.7m on acquisitions, most of which was on the purchase of north-of-England focused Yew at the start of the year.

With the UK death rate decline by around 2% in the final quarter of the year, having been strong in the first half, and the funerals division grew underlying profits 12% to £60.8m, or 6% without the contribution of acquisitions.

Dignity said that while the division benefited from the increase in the number of deaths, it also generated good memorial sales, cost control and the maturing profile of recently opened locations to contributed to the success in the period.

There was £94.2m cash generated from operations during the year, and a £97.7m fundraising that was used to pay off a loan, with management returning £61.9m cash to shareholders in August.

The coffers had £142.3m at the year-end, and a final dividend of 11.83p has been proposed.

McCollum added: "The board remains confident in the group's prospects and considers its well-tested strategy is still appropriate in the current market. As expected, 2014 has started quietly, however the board's expectations for 2014 remain positive and unchanged."

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